On Tuesday, Singapore's Ministry of Trade and Industry (MTI) announced a substantial increase in its economic growth forecast for 2026, now projecting GDP growth between 4.5% and 5.5%, which is more than double the previous estimate of 2% to 4%.
This revision comes after a stronger-than-expected economic performance in the first half of the year, particularly in the manufacturing, wholesale trade, and finance sectors. The MTI also noted that the economic impact of the U.S.-Iran conflict has been less severe than anticipated, with oil inventory drawdowns and a shift to alternative energy sources helping to stabilize global energy prices.
Additionally, Singapore's economy expanded by 5.9% in the second quarter, slightly above earlier estimates. This robust growth may provide the Monetary Authority of Singapore (MAS) with more flexibility to address inflation, especially following its unexpected tightening of monetary policy in late July.
Core inflation in Singapore rose to 1.6% in June, nearing the MAS's forecast range for the year, while headline inflation stood at 1.9%. Overall, the upgraded growth forecast reflects confidence in Singapore's economic resilience and the positive impact of emerging technologies